Absent mitigating responses, much of the projected shortfall will be manifested in agriculture. In the past few decades, traditional rain and river fed agriculture has been supplemented by water storage, surface irrigation and groundwater pumping. The resulting ability to use water in a more assured manner has combined with new seed varieties and use of chemical fertilizers and pesticides to increase yields. However, the current pattern of input use is not sustainable, not only because its use of water is inefficient, but also because of negative long-run environmental impacts such as groundwater depletion and contamination. Given the looming challenges, water management has assumed greater importance than ever before.
Throughout history, agriculture has been a mainstay of India’s economy, especially in providing employment to large sections of its population, and water has therefore been a critical resource. Agriculture accounts for over 80 per cent of India’s water use, and savings must crucially be sought in that sector. For example, the 2030 WRG (2009) report suggests that the most cost-effective measures for India to meet its projected future demand-supply gap are no-till farming, reductions in over-irrigation, more balance between irrigation and fertiliser use, and other improvements in agricultural practices. These are all demand-side efforts. On the other hand, the costliest policies include supply-side measures such as large-scale infrastructure projects, municipal dams and river interlinking.
The efficiency ranking of different water management policies has implications for the level of government at which changes must be effected. Certainly, both local and state-level (inter-state) disputes over water allocation for agricultural use have been common in certain regions. However, many of the issues and cost-effective solutions with respect to water management do not require inter-state coordination. What is the nature of institutions of governance for water, and how do they matter? At the local level, such institutions can be traditional panchayats (village committees), reflecting long-standing local power structures, or their modern elected counterparts. State-level institutions of governance include Departments of Water Resources and of Irrigation, and the occasional river basin organisation. These state institutions have often displaced traditional local management practices. On the other hand, local water user associations represent an institutional development in the opposite direction: There are over 41,000 such associations. In fact, Richards and Singh (1997) provide a theoretical analysis to show that dealing with water rights at the sub-state level may lead to more efficient allocation at the state level. This shifts the focus to local water management as an important stepping stone to more effective resolution of inter-state water disputes, as well as greater efficiency of water use.
On the other hand, the informational requirements of innovation favour action by higher-level governments. State governments ought to be more efficient in trying out, refining and demonstrating new agricultural practices that improve water efficiency and overall agricultural productivity. There are successful precedents in the past, through state-level agricultural extension services and agricultural universities. Unfortunately, the political economy of state policies toward agriculture has favoured subsidies that lead to inefficient and wasteful water use, distorting farmers’ incentives and locking the system into an equilibrium that cannot be sustained in the face of economic growth. In this case, it is possible to make an argument for national policies that improve water management.
At the national level, the central government has a Ministry of Water Resources, a Ministry of Agriculture, a Planning Commission, and several other organisations that can affect how water is managed. The centre has the constitutional authority to shape the management of river basins that encompass more than one state’s territory. Most other water issues are technically (according to constitutional assignments) state responsibilities, as is also the case for agriculture. Nevertheless, the new National Water Mission (NWM) document offers a comprehensive approach to water management issues in India, framed in the context of the challenges of climate change. The NWM includes conservation and efficiency improvements among its goals, and takes account of the need for coordination across ministries and between the centre and states. It pays attention to local water management, but there is a relative disconnect between its discussions of national and state policies on the one hand, and local implementation on the other.
The NWM represents a useful first step in addressing India’s serious challenges with respect to water resources: it makes progress by focusing on a range of problems and potential solutions in a comprehensive document, as well as by proposing new institutional structures for developing and guiding solutions. However, it suffers from specific weaknesses that need to be overcome. First, the NWM lacks a cost-benefit analysis that would allow prioritisation of solutions, on both the demand and supply sides. This lack of economic prioritisation is somewhat of a general problem with Indian policy-making, but can be remedied relatively easily through the kinds of calculations contained in the 2030 WRG report.
Second, the NWM approach is not well integrated with the agricultural policy framework: It lacks sufficient horizontal coordination across government departments. The recent National Policy for Farmers and National Mission for Sustainable Agriculture documents are disconnected from the NWM, and the agriculture ministry is politically more powerful, as well as subject to more political influence than the Ministry of Water Resources. Without a concerted effort to reform agricultural practices and institutions, demand-side efficiencies in agricultural water use will be impossible to realise.
Third, and finally, the NWM does not give adequate attention to vertical coordination. It considers centre-state coordination, but does not integrate this with what needs to be done at the local level. Ultimately, the states have constitutional responsibility for local governments and other local institutions such as water user associations. Getting funds down to the local level, building local capacity, and providing incentives for efficient local actions are general problems of India’s federal system, and solving these problems is particularly urgent for dealing with India’s current and future water resource challenges. One possibility, as suggested by Richards and Singh (1996), is a hierarchy of specialised water management associations, including more widespread local water user associations and river management bodies, linked in a federal structure, to achieve better vertical coordination.
Nirvikar Singh is professor of economics at the University of California, Santa Cruz.